Correlation Between Krystal Biotech and Impact BioMedical,

Can any of the company-specific risk be diversified away by investing in both Krystal Biotech and Impact BioMedical, at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Krystal Biotech and Impact BioMedical, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Krystal Biotech and Impact BioMedical,, you can compare the effects of market volatilities on Krystal Biotech and Impact BioMedical, and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Krystal Biotech with a short position of Impact BioMedical,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krystal Biotech and Impact BioMedical,.

Diversification Opportunities for Krystal Biotech and Impact BioMedical,

0.59

Correlation Coefficient

Krystal Biotech  Impact BioMedical,

Very weak diversification

The 3 months correlation between Krystal and Impact is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Krystal Biotech and Impact BioMedical, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impact BioMedical, and Krystal Biotech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Krystal Biotech are associated (or correlated) with Impact BioMedical,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impact BioMedical, has no effect on the direction of Krystal Biotech i.e., Krystal Biotech and Impact BioMedical, go up and down completely randomly.

Pair Corralation between Krystal Biotech and Impact BioMedical,

Given the investment horizon of 90 days Krystal Biotech is expected to generate 0.31 times more return on investment than Impact BioMedical,. However, Krystal Biotech is 3.19 times less risky than Impact BioMedical,. It trades about 0.05 of its potential returns per unit of risk. Impact BioMedical, is currently generating about 0.01 per unit of risk. If you would invest  8,123  in Krystal Biotech on October 11, 2024 and sell it today you would earn a total of  7,544  from holding Krystal Biotech or generate 92.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	16.36%
Values	Daily Returns

Krystal Biotech  vs.  Impact BioMedical,

Krystal Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Krystal Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Impact BioMedical,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Impact BioMedical, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental drivers, Impact BioMedical, displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Krystal Biotech and Impact BioMedical,

The main advantage of trading using opposite Krystal Biotech and Impact BioMedical, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krystal Biotech position performs unexpectedly, Impact BioMedical, can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Impact BioMedical, will offset losses from the drop in Impact BioMedical,'s long position.

The idea behind Krystal Biotech and Impact BioMedical, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.